Empire editorial: Compromise on senior exemption

Posted: Sunday, April 02, 2006

Juneau's seniors have a right to protest that they're under siege. It's not so cheap to live here, and both the state and the city have been chipping into the financial rewards for longevity, and for blessing Alaska with their talents instead of retreating to warmer climes.

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That doesn't mean that any attempt at fairness or fiscal responsibility must dance around seniors for fear of offending them, though. Juneau and the state should give seniors incentives for sticking around, but when the incentives cost the city millions of dollars, they're worth a second look. Giving a city sales tax exemption to those seniors who might otherwise have to leave because of limited and fixed incomes makes a lot of sense. Giving it to wealthy seniors just because it's a nice gesture makes little sense at a time when the city is having to raise fees on others - notably harbor residents who also may be on the brink of being priced out of Juneau.

This week the city's Senior Sales Tax Exemption Task Force hears from the public about a range of options. Among them is one idea that should work for both the city and its elder residents. It would exempt low-income seniors but start taxing others. Choosing this option sets up the most work for the task force and the city staff - namely studying and settling on an income limit that fits the true cost of living in Juneau, and not just federal low-income guidelines - but ultimately it's a fair compromise. Other suggestions, such as paying seniors to live here, don't address the city's budget troubles. It wasn't just seniors who were cut off by state government when they lost longevity bonuses in 2003; cities lost state revenue-sharing payments.

City officials say the senior sales tax exemption shaved Juneau's revenues by $1.3 million last year. On top of that, a state-mandated property tax exemption for seniors kept $1.7 million from going to the city. For many, these exemptions may be the difference between staying and leaving. For others, they're just a bonus. The city should determine where that line is and act accordingly.

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